Review could lead to higher prices at the commissary

Aug. 8, 2013 - 06:00AM
|

Jessica Wright, undersecretary of defense for personnel and readiness, said defense officials will take a 'candid look' at whether commissaries should operate without taxpayer subsidies. (Sgt. 1st Class Jim Greenhill/Army National Guard)

Defense officials will take a “candid look” at whether commissaries should operate without taxpayer subsidies, said Jessica Wright, acting undersecretary of defense for personnel and readiness.

Eliminating the $1.4 billion annual taxpayer subsidy for commissaries was one potential cost-cutting measure outlined in the Pentagon’s new strategic review, released July 31. That would mean marking up the price of groceries, similar to the way military exchanges mark up their products to pay for operating costs.

The taxpayer subsidy now pays for those costs, such as cashiers’ salaries. That allows commissaries to sell items at cost — and provide a steep discount, generally about 30 percent, compared with average off-base grocery prices. The military community consistently ranks commissaries as a top valued benefit.

“The budget for the Defense Department in total has clearly decreased,” Wright said in a Tuesday interview. “So ... we need to put everything on the table. Commissaries were one of [those] things. It came out in the review that we should look at commissaries the same way we do [the exchanges].

“We’re really going to take a candid look at it.”

Whether elimination of the taxpayer subsidy happens will depend on whether DoD can garner the expected savings, she said.

“It needs to produce the results we think it’s going to produce,” she said. “The service is going to still be provided. It may be a little bit of a different way that we provide the service, but the end state will remain.”